Facebook parent company Meta (FB) will report its Q4 earnings results on Wednesday, marking the social media giant’s first report since its rebranding as a metaverse-first firm.
Here’s what analysts are expecting of the company’s quarter, as compiled by Bloomberg, compared to how it performed in the same quarter last year.
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Revenue: $33.4 billion expected vs. $28.0 billion in Q4 2021.
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Earnings per share: $3.84 expected vs. $3.88 in Q4 2021.
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Ad revenue: $32.5 billion expected vs. $27.1 in Q4 2021.
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Facebook monthly active users: 2.9 billion expected vs. 2.8 billion in Q4 2021.
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Meta app family monthly active users: 3.5 billion expected vs. 3.3 billion in Q4 2021.
Meta’s Q4 marks the first time it will report its earnings as a company focused on building out the metaverse, not just social media apps like Facebook and Instagram. But Meta has warned it will take time to build out its metaverse capabilities to the level where users can interact with each other across vast virtual worlds via augmented reality and virtual reality headsets.
Still, Meta is plowing money into the effort, spending $10 billion on its metaverse work in 2021. And the company said it will continue to invest in its virtual world platform for years to come.
More pressing in the near term is Meta’s ability to continue to navigate Apple’s (AAPL) recent privacy changes that allow iOS users to opt out of letting their apps track them across the web. The feature, called App Tracking Transparency, has been a roadblock for apps like Facebook and Snap (SNAP), which rely on that kind of data to sell ads to advertisers.
During Meta’s Q3 earnings call, CFO David Wehner specifically pointed to App Tracking Transparency (ATT), calling it a potential headwind for the social networking behemoth.
BofA’s Justin Post, however, believes Meta will have a solution to ATT in the coming months.
“For 4Q call, commentary on IDFA impact remains an important stock driver, we believe Meta will make faster progress compared to peers in developing IDFA workarounds, with potential benefits by 2Q [2022],” he wrote in an analyst note ahead of Meta’s Wednesday earnings.
That’s not Meta’s only problem, though. The company continues to face increasing competition from the likes of TikTok and Snap, and, more importantly, must contend with an ongoing antitrust lawsuit from the Federal Trade Commission.
Earlier this month District Judge James Boasberg ruled that the FTC’s suit against Meta can continue despite protests from the social networking company. In its suit, the FTC alleges that Meta ran a buy or bury scheme in which it sought to quash competition from smaller up-and-coming rivals.
The commission ultimately wants to break Meta up into smaller social networks. Without its combined network of apps, however, Meta would lose its spot as the world’s largest social media company. Whether that comes to pass, however, will take years to determine, as the suit is unlikely to be resolved in short order.
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